What is Social Enterprise?
Social Enterprise is a term used to describe a way of doing business, aiming to maximise the positive impacts in the world rather than maximising shareholder return. There is no single answer or rule gloably about what is and isn't a 'social enterprise', although there are some central ideas which have informed a definition currently emerging for New Zealand. Internationally, the social enterprise community have left the definition as a broad set of ideas so as to prevent anyone being excluded whilst adhering to local requirements or conditions. In Scotland, seen by many as world-leading, the social enterprise community have rejected a UK-wide definition and opted instead for a voluntary commitment to a code of practice for social enterprise.
The general ideas of social enterprise are:
The organisation exists, first and foremost, to deliver positive impact in the world. It can articulate what problem(s) it cares about and demonstrate transparent evidence of its contribution to a solution.
The organisation sells goods or services and generates enough revenue to run the organisation without relying on grants or donations (sometimes used to supplement income or increase impact).
Holistic in thinking
Social enterprises recognise the complexity of tackling social and environmental challenges, aiming to maximise their impact in one area without creating negative externalities in other areas.
There can be considerable complexity in defining where or how these ideas are proved in an individual organisation, and this complexity is a driving force for many strong opinions about what is and isn't social enterprise. Some of these thoughts are explored in blog posts on this site. One of the overarching challenges and proposed solutions is through a dedicated legal structure for social enterprise. Currently, in a New Zealand context, a social enterprise can be structured in many ways. Here are a few examples:
Limited Liability Company
Some companies will get Charitable Status, others won't. Some will have specific intent written into their constitution, others won't.
Charitable Trust that owns a Limited Liability Company
Some Charities do some trading of goods and services already, others will create a company structure where all profits are gifted 'up' to the charity.
Cooperative ownership Structure
Sometimes the best benefit can be realised by giving ownership and decision-making power to a specific group of people.
Something else entirely
Other approaches through formal or informal organisations, networks, partnerships, distributed organisations, or communities of practice.
If you think you might be working in or on a social enterprise, then I'd love to hear from you. There are a few simple things that an organisation can do to make their work much simpler and easier once they have identified as a social enterprise. I'm here to help.
Starting a Social Enterprise? Check out Campus. as your first port of call and more writing below.